04/02/2022 (The Edge Market) - SINGAPORE : Malaysian palm oil futures established a tight trading range on either side of RM5,550 per tonne on Friday (Feb 4) as market participants took stock of volatile global markets while still assessing the impact of Indonesia's new curbs on palm exports.

Indonesian authorities shocked global edible oil markets last week by implementing a new rule that made it mandatory for palm oil producers to sell 20% of their output to domestic consumers at fixed prices.

The rule change has clouded the outlook for crude palm oil supplies from Indonesia, and upended global edible oil markets by making what is traditionally the cheapest vegetable oil the costliest among the three major edible oils traded across the world.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange had gained 0.98% to RM5,568 per tonne by 0755 GMT.

Global crop prices recovered on Friday from Thursday's spell of profit-taking, with March soybeans and corn regaining their footing above psychologically significant price levels to stay on course to consolidate recent gains.

Most-active soybean futures were on course for their largest weekly gain since last June, and could see follow-through buying next week once Chinese traders return from their week-long Lunar New Year break, said a Singapore-based oilseed trader.

"China has some catching up to do in terms of pricing in the global soybean supply situation," he said, in reference to recent downgrades in crop size by key agriculture consultants.

"Global balances for many trading houses have tightened in the past week, but China hasn't been around to react."

World food prices rebounded in January and remained near 10-year highs, led by a jump in the vegetable oil index, the United Nations food agency said on Thursday.

Corteva Inc expects prices of grains and oilseeds to remain high this year on record demand levels, its chief executive said on Thursday, following the insecticide and seed company's upbeat sales outlook a day earlier.

Palm oil may rise into the RM5,608 to RM5,676 range as it is stabilising around a support at RM5,484 per tonne, said Reuters technical analyst Wang Tao.